Hormuz Reopening Signals End of Old Certainties for Oil

The Strait of Hormuz is anticipated to reopen soon, a development oil and gas majors have awaited. However, a return to pre-blockade market certainties is unlikely after more than three months of disruption. Analysts suggest that even with a deal between Iran and the United States, the global energy industry faces new risks requiring costly adaptations.

The closure of this critical waterway saw oil prices nearly double, fueling global inflation and exposing supply chain vulnerabilities. Iran has indicated the possibility of imposing 'service fees' on vessels transiting the strait, which companies are likely to pass on to consumers, signaling a "whole new era" for the market.

While oil prices have fallen from their peak following the deal's announcement, they remain higher than before the conflict. The full normalization of production and logistics, along with the dissipation of risk premiums in crude prices, will take time. Furthermore, the United Arab Emirates' decision to leave OPEC has altered the cartel's influence on oil price control.